This paper presents an LMI-based method to design reduced order observers by which we can substitute full order sliding mode observers for a class of uncertain time-delay systems. We show that a reduced order observer can be constructed as long as the uncertain system satisfies the previous LMI existence conditions of a full order sliding mode observer. And we give explicit formulas of the reduced order observer gain matrices. Finally, we give a simple LMI-based design algorithm, together with a numerical design example.